Wednesday, 9 August 2017

New Earth "survivors" chalk up more losses

EXCLUSIVE by DOUG COLLIE
The first set of financial results for five New Earth Solutions businesses since they were sold last year by administrators has revealed combined comprehensive losses of more than £25 million for the period up to July last year.

According to separate sets of accounts posted with Companies House, the quintet of firms now in the ownership of Irish-based Pandagreen have shareholder deficits running into many millions of pounds while two of the waste treatment plants transferred as part of the deal are currently closed.

Immediately after the takeover Pandagreen waived many millions of pounds of debt acquired via the purchase of the businesses rescued from the wreckage of the New Earth Solutions Group's (NESG) spectacular plunge into insolvency.

At the time of the crash in 2016 NESG owed some £150 million to banks.and other institutions together with a host of unsecured creditors. Those unprotected creditors recently received a dividend of 1.5 pence in the pound.

The New Earth group and another of its subsidiaries - New Earth Solutions (Scottish Borders) Ltd - , was the waste treatment 'specialist' handed a £80 million contract by elected members of Scottish Borders Council in 2011 in a bid to solve the area's refuse disposal issues.

However, the deal had to be abandoned four years later without any progress after it became clear the NES technology was useless and no-one was prepared to fund a £21 million treatment facility at Galashiels. By that time the project team assembled by the council had squandered over £2.4 million of public money, much of it on expensive firms of consultants and lawyers.

Here is a run down of the financial performance of the five entities which were purchased immediately after NESG was placed in the hands of administrators Duff & Phelphs in June 2016. The original buyer DM Opco Ltd later sold the business - all of them holding local authority waste disposal contracts - to Pandagreen.

NES Gloucestershire - Pandagreen waived all of the acquired debt of £1.526 million. In December 2016 a fire at the company's Sharpness facility resulted in its closure, and the directors are now considering options available with regards to its continued operation. Suffered a comprehensive loss of £897,000 during the latest accounting period. There is currently a shareholders' deficiency of £6.586 million.

NES Leicestershire - Suffered an operating loss of £5.957 million and a comprehensive loss of £8.024 million. New owners waived £5.062 million of acquired debt of £5.419 million. In March 2017 the firm's facility at Cotesbach was closed. Current shareholders' deficit £13.285 million.

NES West - Recorded an operating loss of £7.170 million and a comprehensive loss of £12.569 million. Pandagreen waived £12.592 million of the acquired debt of £14.732 million. The shareholders' deficit is stated as £26.212 million.

NES Canford - Sustained a comprehensive loss of £2.809 million. Its Irish owners waived £5.455 million of the acquired debt of £7.633 million following the deal with DM Opco. Shareholders' deficit is £4.806 million.

NES Kent - Made an operating profit, but a comprehensive loss of £1.775 million. Pandagreen waived £4.433 million of the acquired debt of £6.259 million. A shareholders' deficit of £9.327 million is recorded.

Each set of accounts contains the statement: "Under new ownership the directors are taking actions to enable the company to trade profitably going forward".